The impact of British Columbia’s Speculation and Vacancy Tax (SVT) on the province’s home sales has been highlighted in a new report.
BCREA’s Market Intelligence Report estimates that the areas covered by the tax have seen sales decline by an additional 12.5% versus those that were not covered since 2018.
Growth in home prices since 2018 is estimated to be 5% lower in taxable regions in BC compared with non-taxable regions due to the SVT.
But when Metro Vancouver is removed from the estimations, there is little impact, suggesting that the impact of the SVT has been mostly on Metro Vancouver.
The SVT’s impact on the rental market also appears to be more material in Metro Vancouver, where there was a record increase in rental supply. But BCREA says that it is not yet possible to disentangle this from impacts of the Empty Homes Tax and short-term rental regulations that were implemented around the same time.
The report notes that home sales are recovering across British Columbia but supply issues need to be addressed if any progress towards better affordability is to be maintained.
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